Thursday, October 31, 2013

And, on the subject of graffiti art, another interesting recent art law story is the VARA lawsuit brought by a group of artists to block the destruction of 5Pointz, "the graffiti mecca in Long Island City." They got a preliminary injunction, with a fuller hearing scheduled for next week. Here is one news report.

One interesting aspect of the case is the temporary nature of the works at issue. The building owner points out that the website for the program notes that pieces are generally "left on display for anywhere from one day to two years," and are "typically displayed for a mere matter of days, weeks, or months, only to be painted over and replaced with a new image." (I know that's to some extent a disputed fact in the case, but let's assume it's so for the moment.) How should this affect our thinking about VARA's application? Imagine that the practice was that each work stayed up for 24 hours and no more. Could it be a VARA violation to paint over (or tear down) that work?

Also in the Times this week, Patricia Cohen on a lawsuit by the Calder estate against his longtime dealer, Klaus Perls, claiming that he "surreptitiously held on to hundreds of Calder’s works and swindled the artist’s estate out of tens of millions of dollars." As Cohen tweets: "Theft, betrayal, Swiss accounts, code names, hush money, fakes. What more could you want ...." Christopher Knight has a favorite detail in the story: "'Madame Andre' wasn't a person, but a nickname for the Perls Swiss bank account." The New Yorker's David Grann (whose name may be familiar to regular readers of the blog) says: "Swiss bank accounts, allegations of betrayal & fraud, & more evidence that the art world is the murkiest realm." Or, as Michael Wolff puts it: "Seriously, are there any honest people in art? Or just a corrupt industry?" For her part, Lee Rosenbaum "find[s] many of the charges by Calder grandson Rower against the late dealer Klaus Perls hard to believe."

The New York Times had a massive feature on the Chinese art market the other day, well worth reading.

Felix Salmon adds his usual excellent commentary here. If you don't have time to read the whole story, Jori Finkel sums it up in one sentence: "Crazy financial speculation + strong copyist tradition in art = a Chinese art market flooded with fakes." Lee Rosenbaum calls it "shocking" and "revelatory," but The Art Market Monitor is not shocked at all: "Who seriously thought art in China was anything more than a speculative instrument, a wild casino?"

The Met got part of a lawsuit relating to its admissions policies thrown out -- the part alleging that it has no authority, under its lease with the city, to charge even a suggested admission fee. Randy Kennedy has the story here.

The part of the lawsuit alleging that the museum misleads people into thinking the admission fee is mandatory (the more interesting part, in my view) survives. Nicholas O'Donnell says "those remaining claims face a tall hurdle to survive." Hrag Vartanian has called the misleadingness claims "the ultimate in legal trolling." Lee Rosenbaum, on the other hand, thinks "the wording and typesize of the Met’s signage should make it clear and obvious that the amount paid is indeed discretionary" and that the museum "should just take care of that now, without waiting to be forced into greater clarity by a judge’s edict."

I've been neglecting the blog lately -- and, like clockwork, there's been a ton of art law happening. Let's see if we can play some catch-up, but, first, just wanted to extend my thanks to Pippa Loengard for inviting me to be part of a panel discussion on deaccessioning up at the Kernochan Center at Columbia Law School earlier this week. Speaking of which, they have their annual symposium a week from tomorrow. Details here.

Wednesday, October 23, 2013

Gallerist's Dan Duray reports that the Cleveland Museum of Art is selling a pair of works at Christie's next month.

This is a helpful lesson to Detroit emergency manager Kevyn Orr that, if you need money for something (in this case, buying art), selling works from a museum collection is a perfectly acceptable way to obtain it.

He may be hearing from certain people that the works the city owns can't be sold because they are "held in the public trust," but obviously that can't be right or else it wouldn't be possible for the Cleveland Museum to just sell these off like this. That's obvious, isn't it?

Tuesday, October 15, 2013

Art in America's Brian Boucher has a report on the agreement reached last week between artist Lauren Clay and the Estate of David Smith. (I negotiated the settlement on behalf of the Smith Estate.) He leaves out a crucial element of the agreement – namely, that Clay agreed not to make any more work based on Smith’s work without permission. With that commitment in hand, the Estate had no problem allowing this limited body of work to be shown.

Sergio Muñoz Sarmiento has some thoughts on the underlying merits here.

UPDATE: Art in America has a new piece up with a fuller description of the settlement:

"As part of the deal, which allows her to show and sell the seven works,
Clay has acknowledged that these are her only pieces based on Smith's
sculptures and agreed not to make further such works except by mutual
consent. She resolved not to make multiples based on these seven works
and pledged to exhibit an agreed-upon artist's statement along with the
sculptures wherever possible."

Be sure to check out Nicholas O'Donnell's post (with images) here as well.

There's an interesting dynamic at play here for the Deaccession Police. Their instinct is always to throw cold water on all of these ideas. For example, if someone suggests the city rent out the works, they will say "there's no real money in that." They think any effort to generate value from the collection is just so ... icky. (I believe that is a technical term fully recognized under the bankruptcy statute.) They want to, as a bankruptcy lawyer quoted in the article says, "pretend the art doesn’t have value."

But I think there's real careful-what-you-wish-for potential here. If they keep dumping on the alternatives to sale, if they keep arguing that the other options won't work, then that opens the door to the emergency manager saying, "Look, we tried to come up with ways to keep from having to sell the art, but everyone kept telling us those ideas wouldn't work. We hate to have to do this, but there is no alternative to selling."

If I were a member of the Deaccession Police, I'd be talking up the possible rental streams every chance I got.

The other big story has been hedge fund manager and "activist investor" Daniel Loeb going after Sotheby's CEO William Ruprecht. Wall Street Journal story on the initial salvo here. Reuters on the poison pill response here. Felix Salmon says Loeb is going to lose.

One of the two big art law stories over the last few days was the Southern District decision denying a motion to dismiss a pair of collector lawsuits brought against Ann Freedman and Knoedler. Laura Gilbert has the story in The Art Newspaper. To me, the big takeaway was that the court sustained the RICO claims alleging a "pattern of racketeering activity," which, as Gilbert points out, carries the potential for treble damages.

I've been busy with the day job, but, before moving on to catch up on some of the other big art law stories over the last few days, the additional points I wanted to make about last week's big New York Times story on Detroit are:

1. The story says that, in contrast to any proposed sale here, "museums regularly sell minor artworks in a curatorial culling process, using the proceeds to acquire other pieces."

That's not true at all. The Hopper the Pennsylvania Academy is selling is not a minor work. The Yves Klein the Brooklyn Museum sold last year is not a minor work. The Cindy Sherman the Akron Museum sold last year is not a minor work.

It's misleading to suggest that the distinction is between sales of major works, on the one hand, and sales of minor works in a curatorial culling process, on the other. Let's at least be honest about what's going on. It would be more honest to say "museums regularly sell any damn works they please and they call it 'ethical' so long as the proceeds are used to buy more art."

The difference isn't in the quality of the works sold. The difference is solely in the use of proceeds, and there is one use of proceeds -- to buy more and more art -- that the museum world wants to privilege above all others and then use smoke and mirrors to avoid having to ever actually explain why that use of proceeds is the only legitimate one.

2. We again hear that a sale of "even a portion" of the collection would "cause an immediate withdrawal of the tax revenue that was voted into being last year by three Michigan counties." But, as I've pointed out, that's not an unavoidable feature of that tax. It would just be a punitive measure imposed by the surrounding counties, a form of blackmail. They could just as easily leave the tax in place.

Thursday, October 03, 2013

Randy Kennedy has a story in today's Times about the situation at the Detroit Institute. I hope to have more to say about it later, but for now, I was stopped in my tracks by the following quote from AAM president Ford Bell:

"Our tradition in this country is that artworks are held in trust for the public good, and you can’t have it both ways. You can’t say the works are held in trust until we decide they’re an asset, and we need to sell them."

Are you kidding me?

Am I awake?

Isn't that exactly the AAMD/AAM approach to deaccessioning? They say the works are held in trust ... until they decide to sell them.

And these are just in the last few months. The list goes on and on. The plain fact is that museums sell work all ... the ... time.

As museum director Hugh Davies has said: "We museum directors can huff and puff about how once we bring these artworks into our collections ... they're held in trust for future generations. It's B.S. We go on and sell them [and use the proceeds to buy more art]." It is, as Gresham Riley has said, simply an exercise in smoke and mirrors.

Bell is exactly right: you can't have it both ways. I've been saying that -- in those exact words -- for years.

"In recent days, I’ve talked to three people at the top
of the decision-making in the bankruptcy process. All said, without question,
that at least part of the collection will have to be — their word — 'monetized'
before the bankruptcy is resolved. The questions are how, and how much?"

He says "the business folks on the DIA board ... need to take this over and negotiate a deal" with the Emergency Manager to "deliver the $500 million or so I’m told he wants from the artwork as
painlessly as possible":

"Can that money be found in the more than 60,000 DIA
pieces in storage? Can leasing art deliver a cash flow? Would wealthy DIA donors
buy the pieces and loan them back permanently to the museum? Could the major
works be collateralized to back a bond sale?"

"By not thinking outside the box, Detroit is losing an ideal opportunity to test a suggestion made three decades ago by a curmudgeonly Harvard political scientist named Edward Banfield. Banfield wrote a book calledThe Democratic Muse, in which he proposed that paintings and sculptures in public museums be sold and replaced by high-quality reproductions. Most museum visitors, he argued, couldn’t tell the difference ... and thus would get the same experience from the fakes as they would from the originals."